Stock Market: Fed Pulled Back (Video)
Summary
- There's only one reason the market's up here with GDP down 50%.
- The Fed.
- They actually pulled back last week.
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Technically the market (NYSEARCA:SPY) had a nice run. It might be a little stretched. Combine that with the Fed actually pulling back and coronavirus case numbers moving up, there might be some shorter-term risk starting to build. I think that will be a buying opportunity because the Fed's thinking we're bottoming.
Here's The Fed Numbers
The Fed reports the official change in their balance sheet weekly on Thursdays after the close. The Fed balance sheet saw it's first pullback since December.
Here's the numbers.
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Above you see the Fed had a rare pullback in their balance sheet. If you think about why the stock market's up while GDP is expected to be down 50%, it's because of the Fed.
So the changes in their balance sheet are important.
Coronavirus Case Numbers
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New case counts accelerated the last two days making it the highest new case additions since tracking the series. This is obviously going the wrong way.
Conclusion
Momentum in the market is very strong. We also talk in the video about strong comments from a Fed official. Still some risk is building for a shorter-term move. I discuss some simple indicators we're watching to be on the right side of the next market move.
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This article was written by
Starting out I could make a mean straight black coffee. But ask me to add some sugar or milk though was a problem. So they got fed up and said, just give him some stocks to follow. That was in the 90s tech boom. Yeah. That worked out.
So, now, mid-life crisis I enjoy second guessing the Fed, which is usually a good strategy. They are not traders, they have no risk discipline, they are having way too much fun with this QE-QT thing and because of their powerful position, are usually way too over-confident in their decision making which is a hint to bad decision making.
My customers have seen that I've been net net pretty good at consistently second guessing the Fed.
Our EPS estimates factor into Street numbers.
I've been on CNBC and a few other places.
But mostly I really just enjoy second guessing the Fed and keeping it simple.
Wishing you all continued success.
https://seekingalpha.com/mp/1072-the-fed-trader/articles
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Comments (4)
Any way, continue to play the I SPY game with us, good always to know your thoughts.
Rose :))
I personally have a feeling of market resilience - despite all these negative news it is still drifting up... Obviously, things can change immediately.